Food

Alcohol e-commerce value to increase by 66% – The Spirits Business

IWSR Drinks Market Analysis has predicted that the value of alcohol e-commerce will rise by 66% across global markets between 2020-2025.

IWSR has released a new online retail study

China currently accounts for almost one third of total e-commerce value. Total beverage alcohol e-commerce sales worldwide are expected to be valued at more than US$42 million in four years’ time, with a quarter of drinkers worldwide shown to currently be buying alcohol online.

“Given the pandemic and overall changing consumer shopping behaviour, it’s certainly not surprising that alcohol e-commerce is growing very quickly,” commented IWSR strategic insights manager Guy Wolfe.

“But what’s interesting is to see the significant variations that have developed both across and within markets in how different consumer groups shop via e-commerce and what their priorities are.”

IWSR’s new e-commerce strategic study reviewed 16 focus markets: Australia, Brazil, Canada, China, Colombia, France, Germany, Italy, Japan, Mexico, the Netherlands, Nigeria, South Africa, Spain, the UK and the US.

The e-commerce channel has seen rapid growth in the past few years: in 2019, its value increased by 12%, then by almost 43% a year later in 2020.

China currently accounts for 60% of total e-commerce value, with the highest proportion of online shoppers among all beverage alcohol buyers.

Meanwhile, the US has the greatest forecast e-commerce value growth, with it being revealed that during the pandemic, the country had the highest proportion (54%) of buyers who made their first purchase of alcohol online.

As a result, the States has been predicted to become the top global market for online beverage alcohol by 2025, with an average annual growth of 20%.

Wolfe added: “E-commerce has clearly become engrained for many consumers, cementing its place as the third sales channel for beverage alcohol purchase.”

E-commerce more ‘diverse’

Looking to 2025, e-commerce is expected to represent 6% of all off-trade beverage alcohol volumes – compared with less than 2% in 2018. The study also found that online business models for alcohol sales are becoming more diverse, as consumers tend to shift between channels to purchase alcohol online.

Buying drinks online is now divided into the ‘traditional’ and ‘modern’, according to IWSR. The traditional model is website and delivery-driven with longer delivery times, and ‘modern’ is centred around app-led online platforms with on-demand features.

Younger legal-drinking-age consumers are said to be driving the shift from ‘traditional’ e-commerce platforms, such as websites with longer delivery times, to app-led online platforms with on-demand features.

In China, Colombia, Mexico, and Nigeria, spirits lead online alcohol sales by value.

The report also found the RTD category is expected to grow strongly over the next five years, gaining shares mainly from wine.

IWSR recently revealed that craft spirits in the US are expected to ‘vastly outperform’ the growth of mainstream brands in the coming years.


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